Clothing Stores

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 35,900 clothing retailers in the US generate revenue by selling a variety of apparel and apparel-related products to consumers. Clothing stores sell primarily new clothing, and may specialize in a particular category, such as men, women, children, infants, families, or accessories. Family clothing stores account for 59% of industry sales. Women’s clothing stores are 19%; other specialty stores are 9%, and men’s clothing stores are 3%.

Seasonality of Demand

Most clothing stores experience major seasonal fluctuations during the winter holiday and back-to-school periods.

Trends and Fads Rapidly Change

The clothing industry is in a constant state of change, driven by fashion trends and fads.

Industry size & Structure

The average clothing retailer employs around 20 workers and generates $3.9 million annually.

    • The clothing retail industry consists of about 35,900 companies that employ 706,000 workers and generate about $139 billion annually.
    • Family clothing stores account for 59% of industry sales. Women's clothing stores are 19%; other specialty stores are 9%, and men's clothing stores are 3%.
    • The industry is concentrated at the top, and highly fragmented at the bottom. The top 20 firms account for 55% of industry sales.
    • The average independent clothing retailer operates out of a single location, employs fewer than 10 workers, and generates between $300,000 and $900,000 annually.
    • The industry includes national chains, regional chains, and independent retailers. Some large apparel manufacturers have retail operations.
    • Large companies include TJX Companies (TJ Maxx, Marshalls), The Gap, Nordstrom, Limited Brands, and Ross.
                              Industry Forecast
                              Clothing Stores Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Dec 1, 2022 - Apparel a Top Category for Holiday Spending
                              • Apparel is a top category for holiday spending this year, according to a recent survey released by market research firm NPD Group. About 43% of respondents reported needing new coats, jackets, and other outerwear. NPD suggests the need for wardrobe updates is being driven by the return to offices, parties, and other in-person gatherings. Over the past two years, outerwear spending has been muted as people spent more time at home and opted for layering instead of buying new coats and jackets, which has created some pent-up demand.
                              • Despite high inflation and rising interest rates, the National Retail Federation (NRF) expects consumer spending to remain resilient this holiday season. While the NRF acknowledges consumers are feeling the pinch of higher interest rates and inflation, it believes economic fundamentals – including job growth, rising wages, and savings accumulated during the pandemic - will sustain consumer spending. The NRF also points to US gross domestic product growth of 2.6% in the third quarter as evidence that the US economy hasn’t slipped into recession. The NRF forecasts holiday spending will rise between 6% and 8% over 2021 levels to reach between $942.6 billion and $960.4 billion. The outlook for 2022 is down from the 13.5% rise seen in 2021 but is better than the average 4.9% growth seen over the last decade.
                              • While some are expecting a brisk peak shopping season, many retailers are still busy trying to unload overstocked inventories to make way for holiday goods, according to Retail Dive. In a survey of retail executives released by Accenture in October, 99% said they had increased promotional activities as part of their holiday plans, and 35% said they were deeply discounting or using other strategies to reduce excess inventory. Some industry watchers suggest a pullback in consumer spending could result in retailers’ bloated inventory issues bleeding into 2023. Widespread apparel inventory excesses on the retail level could reduce wholesale demand.
                              • Amid inflation, 38% of consumers said they plan to spend less on gifts this holiday season than last year, according to a survey by Morning Consult released in November. About 45% of shoppers said they planned to spend about the same as they spent in 2021. The most popular gift category is gift cards, with 56% of survey respondents saying they planned to give them. Gift cards are not as affected by inflation as goods and allow for greater control over spending. Other popular gifts include apparel (39% of gift buyers), toys (36%), money (33%), and holiday food and alcohol (29%).
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